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On September 18, 2024, the US <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> delivered a jumbo-sized surprise to the global economy. Not only did they trim their interest rates by a massive 50 basis points to bring their yields down to 5%, but also hinted at further rate cuts in the upcoming months. This move from the fed and several other central banks globally had pushed expectations high for a similar rate slash closer home, from the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> this month. But governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, in a “picture abhi baaki hai” moment, decided to hold the repo rates here steady, leaving them unchanged at 6.5% for the record 10th straight time. Although, he did tinker with the policy stand, changing it from “rate cuts are absolutely off the table” to a more accommodating “we’re okay with bringing down the rates, if needed”. This, rather neutral, stance from India’s financial custodian sparked hopes for a rate cut in December this year. However, the stubborn inflation levels in September have again dented such hopes. As consumers, you may be wondering what all the hullabaloo this is about, since it hardly makes a difference to your regular financial routine. Well, the majority of both economic growth and inflation is closely connected to this policy stance from the central bank and it does have a rather indirect effect on both our earnings and spending. But more directly, it would have clear implications for those looking to own a house. Even the slightest modification of interest rates, or the lack of it, influences the <keyword id="19916018" type="General" weightage="20" keywordseo="emi" source="keywords">EMI</keyword> you pay significantly. So, all aspiring homebuyers, is this the right time to take out a loan and buy a house? Can you expect a rate cut anytime soon, and what will that mean for your home-owning dreams? We lay it out. <h2>What’s the connection?</h2>You see, buying a house is no small feat, at least financially. The task becomes even more herculean if you are scouting for your own roof in cities like Delhi, Noida, Bangalore or Mumbai where, as Circuit from Munnabhai says, “room shuru hote hi khatam ho jata hai”. Naturally, you’ll have to take a <keyword id="6354730" type="General" weightage="100" keywordseo="home-loan" source="Orion">home loan</keyword> from the bank. Don’t be mistaken, the bank won't give you a loan that covers 100% of the value of the property you want to own. Rather, your loan amount will be equivalent to a certain percentage of the property’s total value. RBI’s guidelines on this are pretty clear: <ul><li>If your loan amount is up to Rs 30 lakh, you can get a loan worth 90% of the property’s value.</li></ul><ul><li>If the loan amount is between Rs 30 lakh and Rs 75 lakh, you are eligible for a loan worth 80% of the property’s value.</li><li>If you are taking a loan of more than Rs 75 lakh, your loan amount will be equivalent to 70% of the property’s value.</li></ul>Now assuming that you have the money, it's all about paying back the principal amount, but not without a little (read hefty) interest added on top. See, when you’re taking a home loan, you are actually signing up for a long-term, even multi-decadal financial commitment, which will unfailingly present itself to your bank accounts and finances every single month, in the form of EMIs, or equated monthly instalments). When you take a home loan, you can choose to pay the interest in two ways (talk about choices!). One is that you decide to keep a fixed rate of interest throughout the tenure of your home loan. So, if you opt for a 25-year fixed-rate home loan at the rate of 8.8% p.a., you’ll have to pay interest at this rate for the next 25 years, till your entire loan is paid off. Yes, you can go backsies and switch to a floating-rate home loan by paying a fee. Floating, as the name suggests, means that your interest rate is not set in stone. But starting October 2019, when it comes to a floating interest rate home loan, your payable interest and EMIs are directly impacted by any changes in <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword>, which were left unchanged by RBI this time around. Why are these two so chummy, you might ask. Well, home loan interest rates are a sum of two things: <ol><li>Repo Rate (the rate at which RBI lends money to banks)</li><li>Operational cost + margins</li></ol>Any plus or minus in this equation would send your home loan interests tanking, or skyrocketing. Vivek Iyer, Partner, Grant Thornton Bharat explains that any change in the repo rates impacts the cost of funds and thereby the home loan interest rates. “When the interest rates are expected to reduce, the corresponding impact will be in the form of a reduced EMI. Home loan borrowers should always try to borrow at a floating rate when interest rates are expected to reduce and at a fixed rate when the interest rates are expected to increase. This minimizes the outflow in the form of EMIs that the home loan borrowers will experience”, he continues. So, no change in repo rates means no change in your home loan interest payout and no financial relief whatsoever. A rate cut, which most experts are anticipating will start this December, would mean your EMI payments come down, and your wallet might save a little more. But there’s also a chance of an UNO reverse happening. In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Consider this. You took a floating interest rate home loan worth Rs 50 lakh in January 2022 at 8% p.a., for a period of 20 years. This brings your total monthly EMI to Rs Rs 41,822. But, as luck would (or won't) have it, RBI raised the interest rate by 250 basis points between May 2022 and February 2023, bringing it to its current status of 6.5%. Some back-of-the-envelope calculations suggest that now, your home loan interest payout will also rise by a hefty 2.5%, taking the total to 10.5%. In other words, you’ll have to dish out Rs 49,919 per month as EMI. Now, won't you heave a sigh of relief if the RBI were to bring down the interest rate by say, even 50 basis points, or 0.5%? Agreed, your EMI will come down just marginally, to Rs 48,251. But look at this over a 20-year period, and you’ll see how big the difference is. <h2>Are rates set to change anytime soon?</h2>Generally, RBI hikes the repo rates if it sees inflation spiralling out of control. Then, in a bid to reduce consumer spending, it raises interest rates to make borrowing expensive. But when the apex bank sees sluggish consumption in the economy, inflation in control and wants to boost spending, it slashes down on interest rates, making it more lucrative for people to borrow. As of now, most experts are not anticipating any changes in the interest rates anytime soon. This means home loans are not getting cheaper anytime soon. The CPI data, which came out yesterday, saw inflation rise to 5.49% in September, compared to 3.65% last month. Food and beverage prices jumped to a four-month high of 8.36% in September, as opposed to a 5.3% rise in August. So a rate cut seems a no-go at the moment! Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities explains that the RBI had probably expected a hardening of inflation and that's why it chose to hold on to the rates in the monetary policy announcement last week. “Now, it seems that RBI will take a cautious stance going ahead and will not be in a hurry into rate cuts like its global peers”, he added. In all this, one thing is clear, in the grand movie of the Indian economy, the RBI has chosen stability over drama. And just like in every good Bollywood film, we're left wondering what twist the sequel will bring. Until then, it might be “The End" for rate cuts, but the show must go on for the Indian economy!

Boom or bust — how RBI’s decision to leave rates unchanged affects homebuyers

The Indian <keyword id="22196321" type="General" weightage="20" keywordseo="credit-card-industry" source="keywords">credit card industry</keyword> is struggling to grow, as new issues slow down on a year-on-year (YoY) basis. Not only has the growth i.e. issuance of new credit cards slowed down, but lenders are also becoming increasingly cautious of the asset qualities, a recent report by Nomura showed. From 19% in July 2024, the growth in the <keyword id="6368202" type="General" weightage="20" keywordseo="credit-card" source="Orion">credit card</keyword> spendings came down to 13% in August 2024. The year-to-date (YTD) growth has also significantly declined in FY25, currently standing at 17%, markedly down from 28% in FY24. For the fifth consecutive month, the number of new credit cards added to the system remained well below the 1-million, or 10 lakh mark. Around 9.2 lakh credit cards were added during the month, a slight uptick from the 7.55 lakh cards that came into the system In July 2024. However, there is growth in this space nevertheless, with about 10.55 crore active credit cards at present, marking a 15.6% YoY increase. Even the annualised spend per card, or the average amount spent via an annual card during an year grew 1% YoY to Rs 1.87 lakh. But this was far less than the 7% growth annual spends via one credit card saw in FY24. Meanwhile, what continues to burgeon consistently is the outstanding amount on these credit cards, which ballooned to Rs 2.7 lakh crore in June 2024, up from Rs 2.6 lakh crore in March 2024, and around Rs 2 lakh crore in the year ago period. To put this in perspective, pre-pandemic, the total outstanding amount stood at Rs 87,686 crore, which marks a 24% CAGR in this amount, in just a span of 5 years. <h2>Large drops, slowdown to sustain</h2>Even the monthly expenditure per card dropped 2% YoY to Rs 16,000 in August, 2024. Subsequently, the transaction volume via credit cards also dipped to 1.6% in August, along with the total amount of <keyword id="21084888" type="General" weightage="100" keywordseo="credit-card-spending" source="keywords">credit card spending</keyword>, which fell to Rs 1.69 lakh crore in August, from Rs 1.73 lakh crore in July. Also, there has been a hefty cutdown in provisions made for credit card reward points, which reflects in the quantum of credit card benefits that have been mowed out by companies of late, making credit cards far less lucrative than before. <h2>HDFC takes lead </h2>During August 2024, <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC bank</keyword> added a total of 2.41 lakh credit cards, taking its total tally of active credit cards to 2.19 crore. <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="261" meta.entityid="ICICI Bank">ICICI Bank</keyword> came a second distant, adding 1.45 lakh credit cards during the month, which means that the second-largest credit card issuer now holds over 1.75 crore active credit cards. Axis Bank and SBI Cards also added 1.27 lakh and 1.1 lakh cards, respectively to their repertoire during the month, while the growth numbers at Kotak Mahindra Bank remained largely flat, stagnating the bank's total card tally at 54.13 lakh. This was due to the ongoing ban on the bank due to its weak IT infrastructural issues imposed by RBI in April 2024. If anything, the bank's number of credit cards declined by 61,191 during the month. Even as the festive season approaches, experts think that it is unlikely to make a major dent in credit card spendings, which are expected to see a further slowdown in the quarters to come.

Credit card growth experiencing a slowdown, as borrowers struggle to pay back loans

<div type="image" title="In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Or, if it leaves the rates unchanged, your EMIs wont budge one bit" msid="114284206" hostid="261" caption="&amp;lt;p&amp;gt;In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Or, if it leaves the rates unchanged, your EMIs wont budge one bit&amp;lt;/p&amp;gt;"></div> On September 18, 2024, the <keyword id="19951097" type="General" weightage="20" keywordseo="us-fed" source="keywords">US Fed</keyword> delivered a jumbo-sized surprise to the global economy. Not only did they trim their interest rates by a massive 50 basis points to bring their yields down to 5%, but also hinted at further rate cuts in the upcoming months. This move from the fed and several other central banks globally had pushed expectations high for a similar rate slash closer home, from the <keyword id="19899808" type="General" weightage="100" keywordseo="rbi" source="keywords">RBI</keyword> this month. But governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, in a “picture abhi baaki hai” moment, decided to hold the repo rates here steady, leaving them unchanged at 6.5% for the record 10th straight time. Although, he did tinker with the policy stand, changing it from “rate cuts are absolutely off the table” to a more accommodating “we’re okay with bringing down the rates, if needed”. This, rather neutral, stance from India’s financial custodian sparked hopes for a rate cut in December this year. However, the stubborn <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword> levels in September have again dented such hopes. As consumers, you may be wondering what all the hullabaloo this is about, since it hardly makes a difference to your regular financial routine. Well, the majority of both economic growth and inflation is closely connected to this policy stance from the central bank and it does have a rather indirect effect on both our earnings and spending. But more directly, it would have clear implications for those looking to own a house. Even the slightest modification of interest rates, or the lack of it, influences the <keyword id="19916018" type="General" weightage="20" keywordseo="emi" source="keywords">EMI</keyword> you pay significantly. So, all aspiring homebuyers, is this the right time to take out a loan and buy a house? Can you expect a rate cut anytime soon, and what will that mean for your home-owning dreams? We lay it out. <h2>What’s the connection?</h2>You see, buying a house is no small feat, at least financially. The task becomes even more herculean if you are scouting for your own roof in cities like Delhi, Noida, Bangalore or Mumbai where, as Circuit from Munnabhai says, “room shuru hote hi khatam ho jata hai”. Naturally, you’ll have to take a <keyword id="6354730" type="General" weightage="20" keywordseo="Home-loan" source="Orion">home loan</keyword> from the bank. Don’t be mistaken, the bank won't give you a loan that covers 100% of the value of the property you want to own. Rather, your loan amount will be equivalent to a certain percentage of the property’s total value. RBI’s guidelines on this are pretty clear: <ul><li>If your loan amount is up to Rs 30 lakh, you can get a loan worth 90% of the property’s value.</li></ul><ul><li>If the loan amount is between Rs 30 lakh and Rs 75 lakh, you are eligible for a loan worth 80% of the property’s value. </li><li>If you are taking a loan of more than Rs 75 lakh, your loan amount will be equivalent to 70% of the property’s value. </li></ul>Now assuming that you have the money, it's all about paying back the principal amount, but not without a little (read hefty) interest added on top. See, when you’re taking a home loan, you are actually signing up for a long-term, even multi-decadal financial commitment, which will unfailingly present itself to your bank accounts and finances every single month, in the form of EMIs, or equated monthly instalments). When you take a home loan, you can choose to pay the interest in two ways (talk about choices!). One is that you decide to keep a fixed rate of interest throughout the tenure of your home loan. So, if you opt for a 25-year fixed-rate home loan at the rate of 8.8% p.a., you’ll have to pay interest at this rate for the next 25 years, till your entire loan is paid off. Yes, you can go backsies and switch to a floating-rate home loan by paying a fee. Floating, as the name suggests, means that your interest rate is not set in stone. But starting October 2019, when it comes to a floating interest rate home loan, your payable interest and EMIs are directly impacted by any changes in <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword>, which were left unchanged by RBI this time around. Why are these two so chummy, you might ask. Well, <keyword id="173069" type="General" weightage="20" keywordseo="Home-loan-interest" source="Orion">home loan interest</keyword> rates are a sum of two things: <ol><li>Repo Rate (the rate at which RBI lends money to banks)</li><li>Operational cost + margins</li></ol>Any plus or minus in this equation would send your home loan interests tanking, or skyrocketing. Vivek Iyer, Partner, Grant Thornton Bharat explains that any change in the repo rates impacts the cost of funds and thereby the home loan interest rates. “When the interest rates are expected to reduce, the corresponding impact will be in the form of a reduced EMI. Home loan borrowers should always try to borrow at a floating rate when interest rates are expected to reduce and at a fixed rate when the interest rates are expected to increase. This minimizes the outflow in the form of EMIs that the home loan borrowers will experience”, he continues. So, no change in repo rates means no change in your home loan interest payout and no financial relief whatsoever. A rate cut, which most experts are anticipating will start this December, would mean your EMI payments come down, and your wallet might save a little more. But there’s also a chance of an UNO reverse happening. In case RBI is in the mood to hike the interest, your home loan EMIs might end up taking more from your pockets. Consider this. You took a floating interest rate home loan worth Rs 50 lakh in January 2022 at 8% p.a., for a period of 20 years. This brings your total monthly EMI to Rs Rs 41,822. But, as luck would (or won't) have it, RBI raised the interest rate by 250 basis points between May 2022 and February 2023, bringing it to its current status of 6.5%. Some back-of-the-envelope calculations suggest that now, your home loan interest payout will also rise by a hefty 2.5%, taking the total to 10.5%. In other words, you’ll have to dish out Rs 49,919 per month as EMI. Now, won't you heave a sigh of relief if the RBI were to bring down the interest rate by say, even 50 basis points, or 0.5%? Agreed, your EMI will come down just marginally, to Rs 48,251. But look at this over a 20-year period, and you’ll see how big the difference is. <h2>Are rates set to change anytime soon?</h2>Generally, RBI hikes the repo rates if it sees inflation spiralling out of control. Then, in a bid to reduce consumer spending, it raises interest rates to make borrowing expensive. But when the apex bank sees sluggish consumption in the economy, inflation in control and wants to boost spending, it slashes down on interest rates, making it more lucrative for people to borrow. As of now, most experts are not anticipating any changes in the interest rates anytime soon. This means home loans are not getting cheaper anytime soon. The CPI data, which came out yesterday, saw inflation rise to 5.49% in September, compared to 3.65% last month. Food and beverage prices jumped to a four-month high of 8.36% in September, as opposed to a 5.3% rise in August. So a rate cut seems a no-go at the moment! Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities explains that the RBI had probably expected a hardening of inflation and that's why it chose to hold on to the rates in the monetary policy announcement last week. “Now, it seems that RBI will take a cautious stance going ahead and will not be in a hurry into rate cuts like its global peers”, he added. In all this, one thing is clear, in the grand movie of the Indian economy, the RBI has chosen stability over drama. And just like in every good Bollywood film, we're left wondering what twist the sequel will bring. Until then, it might be “The End" for rate cuts, but the show must go on for the Indian economy!

Simply Put: Boom or bust — how RBI’s decision to leave rates unchanged affects homebuyers

<keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC Bank</keyword> on Saturday posted a marginal 5 per cent increase in its standalone profit at Rs 16,821 crore in the second quarter ended September 2024. The country's biggest private sector lender had earned a <keyword id="19942166" type="General" weightage="20" keywordseo="net-profit" source="keywords">net profit</keyword> of Rs 15,976 crore in the same quarter a year ago. Total income increased to Rs 85,500 crore during the quarter under review against Rs 78,406 crore in the same period last year, HDFC Bank said in a regulatory filing. The bank reported <keyword id="20202322" type="General" weightage="20" keywordseo="interest-income" source="keywords">interest income</keyword> of Rs 74,017 crore during the quarter compared to Rs 67,698 crore in the same period a year ago. Net Interest Income (NII) improved to Rs 30,110 crore, from Rs 27,390 crore in the second quarter of previous year, registering a 10 per cent growth. As regards asset quality, the bank witnessed slight deterioration with gross <keyword id="19927319" type="General" weightage="20" keywordseo="Non-Performing-Assets" source="keywords">Non-Performing Assets</keyword> (NPAs) rising to 1.36 per cent of the gross loans by the end of September 2024 from 1.34 per cent a year ago. Similarly, net NPAs or bad loans rose to 0.41 per cent from 0.35 per cent at the end of the second quarter of the previous fiscal. On a consolidated basis, the bank logged a growth of 6 per cent in net profit to Rs 17,826 crore as against Rs Rs 16,811 crore in Q2FY24. SEE ALSO:<a href="https://www.businessinsider.in/personal-finance/news/best-credit-cards-for-online-shopping-in-india/articleshow/114354358.cms" target="_blank"></a> <a href="https://www.businessinsider.in/personal-finance/news/best-credit-cards-for-online-shopping-in-india/articleshow/114354358.cms" target="_blank">Best credit cards for online shopping this festive season</a><a href="https://www.businessinsider.in/tech/mobile/webstories/best-smartphones-under-25000-in-india-in-october-2024/slidelist/114339207.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/webstories/best-smartphones-under-25000-in-india-in-october-2024/slidelist/114339207.cms" target="_blank">Best smartphones under ₹25,000 in India in October 2024</a><a href="https://www.businessinsider.in/stock-market/webstories/waaree-energies-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/114350114.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/waaree-energies-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/114350114.cms" target="_blank">Waaree Energies IPO – Price band to risk factors, all you need to know</a>

HDFC Bank Q2 profit soars 5% to ₹16,821 crore

In a significant move, the <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="100" keywordseo="rbi" source="keywords">RBI</keyword>) has imposed penalties on <keyword id="19952948" type="General" weightage="20" keywordseo="axis-bank" source="keywords">Axis Bank</keyword> and <keyword id="19895995" type="General" weightage="20" keywordseo="hdfc-bank" source="keywords">HDFC Bank</keyword> for lapses in regulatory and statutory compliance. The fines, which amount to a total of ₹2.91 crore, highlight the central bank's ongoing efforts to ensure that financial institutions adhere to prescribed guidelines. The RBI levied a penalty of ₹1.91 crore on Axis Bank for violations that included contraventions of the <keyword id="19976511" type="General" weightage="20" keywordseo="banking-regulation-act" source="keywords">Banking Regulation Act</keyword> and non-compliance with specific RBI directions related to interest rates on deposits, Know Your Customer (KYC) norms, and collateral-free loans for agriculture. Meanwhile, HDFC Bank faced a ₹1 crore fine for failing to comply with directions concerning interest rates, customer service practices, and the use of recovery agents. <h2>Axis Bank: Key regulatory failures</h2>Axis Bank’s penalty stems from a supervisory evaluation conducted by the RBI based on its financial position as of March 31, 2023. Upon reviewing the bank’s activities, the RBI found several areas of non-compliance. One of the primary issues was the opening of savings deposit accounts in the names of ineligible entities, a direct violation of regulatory norms. Additionally, Axis Bank was found to have issued multiple customer identification codes to certain clients instead of assigning a Unique Customer Identification Code (UCIC), which is mandatory to avoid duplication and ensure proper monitoring of accounts. The bank also violated guidelines concerning agricultural loans. RBI regulations prohibit banks from asking for collateral for agricultural loans up to ₹1.60 lakh, but Axis Bank had obtained such collateral in certain cases. Lastly, a wholly-owned subsidiary of Axis Bank was found to be engaged in providing technology services—an activity that is not permissible for a banking company. This contravention added to the overall penalty levied by the central bank. <h2>HDFC Bank: Regulatory shortcomings</h2> In the case of HDFC Bank, the RBI’s investigation was based on its financial position as of March 31, 2022. The central bank uncovered several violations, including the offering of gifts, specifically covering the first-year premium for complimentary life insurance, which exceeded the permissible limit of ₹250. Moreover, HDFC Bank was found to have opened savings accounts in the names of ineligible entities, a violation similar to that of Axis Bank. Another significant failure was the bank’s inability to ensure that customers were not contacted by bank officials outside the permitted time frame of 7 am to 7 pm. <h2>RBI's Stance on Compliance</h2> While the RBI has been stringent in penalising both banks, it clarified that these penalties are based on lapses in regulatory compliance and are not reflective of the validity of any transactions or agreements between the banks and their customers. The central bank’s message is clear—financial institutions must adhere strictly to guidelines to maintain transparency, protect customers, and uphold the integrity of the banking system. The penalties serve as a reminder to all banks to stay vigilant and maintain high standards of compliance to avoid such financial and reputational damage in the future. Both Axis Bank and HDFC Bank have accepted the fines and are expected to take corrective actions to avoid future infractions. For customers, this action from the RBI is a reassurance that regulatory oversight remains a priority to ensure fair banking practices across the country.

RBI slaps fine of Rs 2.91 crore on Axis Bank and HDFC Bank: All details

<ul><li>Shop around for the lowest <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword> as even a difference of a few percentage points can make a significant difference to your EMI </li><li>It is important to take a close look at your <keyword id="63061" type="General" weightage="20" keywordseo="cash-flow" source="Orion">cash flow</keyword> and figure out whether you can consistently pay your monthly <keyword id="6388045" type="General" weightage="20" keywordseo="emis" source="Orion">EMIs</keyword> without putting a strain on your finances </li><li>Consider prepayment penalty before finalising a <keyword id="180660" type="General" weightage="20" keywordseo="personal-loan" source="Orion">personal loan</keyword> </li></ul>A personal loan can come in handy when you need money in case of an emergency. Being an unsecured loan, it requires less documentation and is easy to get. But it also means that the rates of interest are very high. Here are 5 things to keep in mind when taking a personal loan. Do you really need a personal loan? The first thing to ask yourself is whether you actually need a personal loan. If it is to buy something which you do not really need, then you should avoid it. Even if you need the money for an emergency, consider secure loans like loans against <a href="https://www.businessinsider.in/personal-finance/news/loans-against-mutual-funds-may-come-at-a-lower-interest-rate-but-experts-urge-caution/articleshow/108510644.cmshttps://www.businessinsider.in/personal-finance/news/loans-against-mutual-funds-may-come-at-a-lower-interest-rate-but-experts-urge-caution/articleshow/108510644.cms">mutual funds</a>, FDs or gold. A personal loan should always be the last option. Compare interest rates: Since they are <keyword id="586043" type="General" weightage="20" keywordseo="unsecured-loans" source="Orion">unsecured loans</keyword>, personal loans have high rates of interest ranging from 11% to 24%. This is decided based on several factors like your income, your credit score and so on. Shop around for the lowest interest rates you can get as even a difference of a few percentage points can make a difference to your EMI. You should check with your bank first because they may offer you a good interest rate. Look at other fees and charges: Interest rates are important, but so are the fees and the charges. There could be processing fees which can range between 0.5%- 2.5% of the loan amount, though in most cases they are capped. “Also, consider prepayment penalty before finalising a personal loan,” says Abhishek Kumar, founder and chief<a href="https://business.outlookindia.com/invest/investment"> </a>investment advisor at SahajMoney, a financial planning firm. This is mostly about 2% of the loan amount due if you want to prepay a loan within a certain period. Check your ability to pay your monthly EMIs: It is important to take a close look at your cash flow and figure out whether you can consistently pay your monthly EMIs without putting a strain on your finances. “Keep monthly EMI below 35% of one's take-home income,” says Kumar. Remember, that here a loan tenure plays an important role. If the tenure is high the EMI will be low, but the total interest you need to pay will be higher. So you need to strike the right balance. Stay away from offers that are too good to be true: At present, a lot of fake loan apps are doing rounds. They may offer you higher loan amounts, interest rates, side-step necessary documentation, and offer faster disbursals. However, it is important to choose a trusted bank or a loan provider and not fall for gimmicky offers. Otherwise, predatory recovery practices can affect your ability to lead a peaceful life. Personal loans can come in handy when you need money, but doing the right homework is key for long-term financial success.

5 things to keep in mind before taking a personal loan

<ul><li>Three banks would be most impacted by the move as their capital ratios would be affected by 30-85 basis points.</li><li>Capital buffers will have to be further strengthened by banks if they want to lend to consumers for unsecured loans.</li><li>Borrowers with more than five personal loans rose from 1% in 2018 to 7.7% in March 2023, as per a report.</li></ul> Shares of <keyword id="116253" type="General" weightage="50" keywordseo="sbi-cards" source="Orion">SBI Cards</keyword>, RBL Bank, <keyword id="6357149" type="General" weightage="50" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword> and <keyword id="6653" type="General" weightage="50" keywordseo="icici-bank" source="Orion">ICICI Bank</keyword> are expected to come under pressure after the Reserve Bank of India asked lenders on Thursday to set aside more capital for consumer loans. This move is expected to impact the capital buffers of these banks. According to analysts, these banks would be most impacted by the move as their capital ratios would be affected by 30-85 basis points. For banks the first line of defense against bad loans is CET Tier 1 capital or Common Equity Tier 1 capital (CET1), which is the highest quality of regulatory capital, as it absorbs losses immediately when they occur. According to Motilal Oswal Financial Services, the CET 1 impact would be maximum for RBL/HDFC Bank/ICICI Bank at 84 basis points/72 basis points/64 basis points. Among non banks, SBI Cards would be the most vulnerable with a 416bp impact on capital ratios. Capital buffers will have to be further strengthened by banks if they want to lend to consumers for unsecured loans. If a bank had to set aside say ₹20 for loans, it will now have to set aside 25% more for every unsecured loan it issues. Not just this the banks will have to set aside more capital if they want to lend to shadow banks or non banking financial institutions as well. When cost of capital increases, so will lending rates. In the years after the pandemic broke, unsecured personal loans to retail borrowers have been on a steady rise. Not just banks but even non banks have been merrily issuing such loans to borrowers, and in many cases these borrowers have multiple such loans used for consumption. From 12-14% these loans are now growing at 30% rate. The central bank has cracked down on some non banks for not adhering to norms while underwriting such small ticket loans. The red flags have been flying high for a while now. According to proprietary research done by UBS, borrowers with more than five personal loans rose from 1% in 2018 to 7.7% in March 2023. New disbursement of personal loans to borrowers with weaker credit profiles accounted for 22% of disbursements. Of all banks, UBS was of the view that state-owned banks and non banking financial companies had a much higher share of weak borrowers compared to private banks. Analysts believe that pressure on net interest margins and higher credit costs to impact earnings of banks and shadow banks over FY24 and FY25. Paytm, a fintech company, has recently built a large loan portfolio which is mostly comprised of personal loans. With the <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword> cracking down on these loans, the loan growth will be impacted for Paytm too. Deepak Shenoy, CEO of Capital Mind, took to social media to explain the impact, “See how it affects SBI cards: SBI Cards had credit card receivables of ₹ 45,000 crore with 23% capital adequacy ratio (CAR). So ₹10,500 cr in capital (23% of ₹45Kcr). Increase risk weight to 125% means ₹45K cr=₹56K cr risk weighted assets.” Shenoy explains that if “SBI Cards wants to grow, and keep high CARs (min is 15% I think?) they’ll need to raise capital and dilute. Which means for the same profit = higher capital. Means lower ROEs.” ALSO READ: <a href="https://www.businessinsider.in/stock-market/markets/news/foreign-investors-continue-to-bet-big-on-banks-and-nibbling-on-small-and-mid-cap-stocks/articleshow/104462273.cms" data-type="tilCustomLink" target="_blank">Borrowers with multiple personal loans a big risk to profitability of banks and NBFCs</a>

RBI tightens norms on personal loans for banks and NBFCs; stocks to be under pressure

Kolkata, Outlook for bank <keyword id="6354680" type="General" weightage="20" keywordseo="credit" source="Orion">credit</keyword> offtake remains positive in 2024 while deposit growth is expected to improve, according to the latest research report of <keyword id="19974164" type="General" weightage="20" keywordseo="careedge-ratings" source="keywords">CareEdge Ratings</keyword>. The report said that credit offtake continued to grow, increasing 20.3 per cent year-on-year to reach Rs 159.7 lakh crore for the fortnight ending January 12, 2024. The rise was due to the impact of the merger of <keyword id="19896378" type="General" weightage="20" keywordseo="hdfc" source="keywords">HDFC</keyword> with <keyword id="19895995" type="General" weightage="20" keywordseo="hdfc-bank" source="keywords">HDFC Bank</keyword> along with growth in personal loans. If the impact of the merger is excluded, credit grew at a lower rate of 16.1 per cent year-on-year for the fortnight compared to last year's growth of 16.5 per cent, the report said. Deposits also grew 13.1 per cent year-on-year the fortnight (including the merged impact). The report said that deposit growth is expected to improve in 2024. The outlook for credit offtake continues to remain positive in 2024 supported by factors like economic expansion and continued push for retail credit supported by increasing digitalisation, according to the report. Unsecured personal loans and <keyword id="19938496" type="General" weightage="20" keywordseo="nbfc" source="keywords">NBFC</keyword> advances might witness a certain level of cooling off, the report said, adding that currently, capital levels are quite comfortable for banks and NBFCs. Higher interest rates, inflation and global uncertainties regarding geo-political issues are other key factors which could weigh on credit growth, the report said. The credit-deposit (CD) ratio has been generally hovering below 80 per cent since September 2023, the report said. The CD ratio saw an uptick of 44 basis points and stood at 79.9 per cent in the fortnight ending January 12, 2024, reaching a three-year high. Deposits have seen relatively steady performance since the COVID times, the report said. However, in recent years, credit growth has been significantly outperforming deposit growth, it said.

Outlook for bank credit offtake remains positive in 2024: CareEdge Ratings

<ul><li>In the last two years, interest rates on loans have gone up by 1.9% – undoing the <keyword id="6357050" type="General" weightage="20" keywordseo="EMI" source="Orion">EMI</keyword> mathematics of most borrowers. </li><li>Most experts predict that there are more rate hikes coming as early as December. </li><li>For auto and <keyword id="35519" type="General" weightage="20" keywordseo="home-loans" source="Orion">home loans</keyword>, borrowers can consider extending their tenures if the burden is higher. </li></ul>Be prepared to pay more interest if you want to borrow to buy a home or a car. The era of low interest rates has formally ended, with the Reserve Bank of India kicking off its rate hike cycle in May. The repo rate or the rate at which central banks lend to banks has risen by 1.9% after four consecutive hikes. That means EMIs will only go up making it costlier for borrowers. While existing borrowers of home loans may see their tenures go up, equated monthly installments (EMIs) of personal loans and <keyword id="35527" type="General" weightage="20" keywordseo="auto-loans" source="Orion">auto loans</keyword> will rise further after today’s 50 basis point rate hike. "The Reserve Bank of India has hiked the repo rate by 50 basis points. This marks the fourth consecutive rise in the repo rate, bringing it to 5.9%. This will definitely impact the new and existing borrowers. However, this decision has been made to curb the rising inflation. With India’s inflation rate being 7%, the value of the currency might fall without the intervention of the RBI in order to try and sustain it and bring it down," said HP Singh, chairman &amp; managing director of Satin Creditcare Network. Home loans Let’s look at home loans first. If you have ₹50 lakh outstanding with a bank at an 8.5% interest rate spread across 20 years, the effective EMI you have is at ₹43,391. However, if the 50 basis point hike is passed on to the loan, the EMI will go up to ₹44,986 – an effective increase of ₹595 per month. For every one lakh of home loan for this tenure, the EMI will go up by ₹32. Auto loans The net impact is different for auto loans where the tenures are shorter but interest rates are different. For example if you have a ₹10 lakh auto loan at around 8.6% interest rate for a tenure of seven years, your EMI has been at ₹15,887. Again, in the changed interest rate regime, it would come up to ₹16,140 every month – an effective increase of ₹253. For every lakh of an auto loan for the said tenure, the EMI will go up by ₹25. Personal loans For a personal loan that’s spread across two years, the EMI for a ₹3 lakh loan at 11.4% would be at ₹14,038. After an interest rate reset, it would go up to ₹14,108 — an effective increase of ₹70. Increasing loan tenure? In the last two years, interest rates on loans have gone up by 1.9% – undoing the EMI mathematics of most borrowers. For auto and home loans, borrowers can consider extending their tenures if the burden is higher. However, it is to be noted that extending tenures will increase the interest payable across the years — and especially for large loans like home loans, the net payable will balloon correspondingly. The other factors that play a role in tenure extension would be the borrower’s age – while younger borrowers can afford it, most people must clear off long term loans before retirement age of 60. More hikes ahead? When he announced the rate hikes today, RBI governor <keyword id="6359111" type="General" weightage="20" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said that the consumer price inflation is still above the central bank’s tolerance level. “Going forward, the RBI will remain vigilant, agile and nimble in its liquidity management operations and would use all instruments at its disposal to mitigate the spillovers of global financial market volatility on domestic financial markets,” said Das. It means going ahead, there could be more rate hikes on the horizon and a lot of experts predict that too. “We continue to expect another 35 bps hike in December followed by a pause with the RBI assessing Fed actions, and impact of past rate hikes on domestic growth and inflation,” said Suvodeep Rakshit, senior economist at Kotak Institutional Equities. Those who have banked on low interest rates offered during the pandemic to take home loans, might have to adjust their monthly math — but the burden of growing interest is what most people across the world have been dealing with and partial prepayments will help if it can be afforded. Since more rate hikes might be coming, it would be a good idea to pay off personal loans if possible as they can get costlier. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/markets-shrug-off-50-bps-salvo-by-the-reserve-bank-of-indias-as-hike-largely-priced-in/articleshow/94550783.cms">Markets shrug off 50 bps salvo by the Reserve Bank of India’s as hike largely priced in</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/tata-tigor-ev-vs-tata-tiago-ev-comparison-of-price-and-features/slidelist/94551771.cms">Tata Tigor EV vs Tiago EV - which one should you buy?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/presidential-commission-recommends-stamping-of-h-1b-visas-inside-us/articleshow/94551768.cms">Presidential commission recommends stamping of H-1B visas inside US</a>

Here is how much your EMI will go up after the recent repo rate hike

Both indices, <keyword id="19896382" type="General" weightage="20" keywordseo="Sensex" source="keywords">Sensex</keyword> and <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords">Nifty</keyword>, closed the day in red. While Nifty was down by 0.27% and closed at 24,413.50, Sensex also dipped over 200 points and closed at 80,148.88 points on July 24th, 2024. <keyword id="20079495" type="General" weightage="20" keywordseo="HDFC-Life" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Life" meta.hostid="261" meta.entityid="HDFC Life">HDFC Life</keyword> (up by 4.36%), <keyword id="19924892" type="General" weightage="20" keywordseo="Tech-Mahindra" source="keywords" meta.keywordsubtype="org" meta.entityname="Tech Mahindra" meta.hostid="261" meta.entityid="Tech Mahindra">Tech Mahindra</keyword> (up by 3.12%), <keyword id="19908646" type="General" weightage="20" keywordseo="BPCL" source="keywords" meta.keywordsubtype="org" meta.entityname="BPCL" meta.hostid="261" meta.entityid="BPCL">BPCL</keyword> (up by 2.91%), <keyword id="19903558" type="General" weightage="20" keywordseo="NTPC" source="keywords" meta.keywordsubtype="org" meta.entityname="NTPC" meta.hostid="261" meta.entityid="NTPC">NTPC</keyword> (up by 2.67%) and <keyword id="19906967" type="General" weightage="20" keywordseo="Tata-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="Tata Motors" meta.hostid="261" meta.entityid="Tata Motors">Tata Motors</keyword> (up by 2.46%) were amongst the top gainers of the day. On the other hand, Bajaj Finserv (down by 2.09%), Tata Consumers (down by 1.90%), Britannia (down by 1.88%), Axis Bank (down by 1.82%) and Bajaj Finance (down by 1.67%) were amongst the leading laggards. Bajaj Finance reported its Q1FY25 results recently. While its profits rose 14% YoY to Rs 3,912 crore, the firm's net interest income also reported a 25% jump. However, the stock was trading at Rs 6,614.90, down by over 1% today. The company's loan losses and provisions during April-June 2024 period jumped to Rs 1,685 crore, as opposed to Rs 995 crore during April-June 2023. Most midcap and small cap indices registered significant growth today. Mid cap 100 was up by 1.04%, small cap 100 was up by 1.76%. However, India VIX dipped by as much as 7.72%. Small cap 50 (up by 1.74%), small cap 250 (up by 1.86%) and microcaps (up by 2.68%) also saw healthy leads during the day. As for sectoral indices, consumer durables and oil and gas were up by over 1%, while media gained over 2% during the day. Auto, bank, <keyword id="19931572" type="General" weightage="20" keywordseo="fmcg" source="keywords">FMCG</keyword>, PSU and private banks closed the day in red. Mr. Aditya Gaggar Director of Progressive Shares noted that a mixed trend was seen in the markets where mid and smallcap segments were seen compounding their morning gains while Bank Nifty-led correction dragged the index lower to end the session at 24,413.50 with a loss of 65.55 points. "Media was the top gainer among the sectors followed by energy while profit-booking-led correction was seen in the FMCG segment. On the daily chart, the index has formed a spinning top candlestick pattern indicating indecisiveness between the bulls and bears. The level of 24,200 will remains a crucial support while 24,560 is considered as an immediate resistance", Gaggar continued. Out of the 2,770 stocks traded during the day, 1,992 stocks saw advances, while 700 declined, and 78 others remained unchanged. 130 stocks hit their 52-week high during the day, while 14 stocks hit their 52-week low price. 210 stocks hit the upper circuit, or maximum permissible trading price during a singular trading session, while 46 stocks hit the lower circuit, or the minimum permissible price allowed during one trading session.

Stock market closing: Sensex dips 280 points to close in red, Nifty closes 0.27% down

<ul><li>Travel loans are <keyword id="35520" type="General" weightage="20" keywordseo="personal-loans" source="Orion">personal loans</keyword> and since they are unsecured, they have a high rate of interest. </li><li>Make sure your EMI is not more than 10% of your monthly income. </li><li>Carefully read and understand the terms and conditions of the loan, including repayment schedules and any potential penalties for late payments.</li></ul>A trip to Europe may be on the bucket list for many people, but it can burn a hole in your pocket. However, in this age when you can buy an iPhone 14 Pro Max in monthly instalments, you can also fund your Europe trip through a loan. “Personal loans for holidays are similar to regular personal loans, except that the borrower has flexible repayment options, wherein he can pay only the interest in the first six months and the regular EMIs can start post that. This helps the borrower manage his cash flow in a better way,” says Rahul Kalyani, vice president, partnerships, LoanTap, a personal loan app. <cmsannotation type="cmsannotation" annotationid="High interest rates" comment="subhead" text="High interest rates">High interest rates</cmsannotation> What comes in the guise of a holiday loan or a <keyword id="7185356" type="General" weightage="20" keywordseo="travel-loan" source="Orion">travel loan</keyword> is, thus, actually, a personal loan. And since these are unsecured loans, they have a high rate of interest. Interest rates on such loans would start from 10.5%, but can go as high as 24% per annum, according to BankBazaar. The <keyword id="6357149" type="General" weightage="50" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword> website also mentions a similar interest rate range. Since the tenure for personal loans range from 12 months to 5 years, for a loan of ₹1 lakh at 14% interest, one will need to pay an EMI in the range of ₹8,979 (for 12 months) to ₹2,327 (5 years). Higher interest rates would mean a higher EMI outgo. The interest rates on these loans are determined by various factors. “First, credit score plays a significant role, as a higher score often leads to lower interest rates due to the lower risk associated with the borrower. Additionally, lenders consider the borrower's income level and debt-to-income ratio to assess their repayment capacity. Loan amount and term also affect interest rates, with larger amounts or longer terms potentially resulting in higher rates,” says Yashoraj Tyagi, chief business officer and chief technology officer at CASHe, a personal loan app. <cmsannotation type="cmsannotation" annotationid="The EMI can bite you for years to come" comment="subhead" text="The EMI can bite you for years to come">The EMI can bite you for years to come</cmsannotation> Taking a loan for a holiday means that you're going to remember your holiday for months if not years to come, and not for the reasons you would like to. Let us take an example. Suppose you take a loan of ₹6 lakh to fund a Europe trip for your family at an interest rate of 14%. If you want to repay the loan over 3 years, the monthly EMI will be around ₹20,500. This means that over the next three years, you will have an EMI commitment of ₹20,000 over and above your other monthly expenses. If not planned properly, this can hurt. Missed payments would mean penalties such as late fees, and an adverse effect on your credit score. <cmsannotation type="cmsannotation" annotationid="Analyse your EMI-paying capability" comment="subhead" text="Analyse your EMI-paying capability">Analyse your EMI-paying capability</cmsannotation> “Only take a travel loan if you don’t have enough cash in your assets,” says Anuj Kacker, chief operating officer and co-founder of Freo, a neobank. Before going for any personal loan like a holiday loan, it is important to take a close look at one's monthly expenses and financial obligations. “Understanding the debt-to-income ratio helps determine if the EMI payments can be comfortably accommodated within the existing budget. Performing a careful assessment of personal finances and creating a realistic budget that accounts for the EMIs can provide a clearer picture of whether the loan can be repaid without undue financial strain,” says Tyagi. You may also seek the advice of a financial planner or use online EMI calculators to evaluate whether you can pay off the loan smoothly and then make an informed decision. “Make sure your EMI is not more than 10% of your monthly income. Keep in mind that while the loan is available, be frugal where you can. Money which comes easily can be seen as free money and may be spent carelessly. Beware of that,” says Shweta Jain, chief executive officer and founder of Investography, a financial planning firm. <cmsannotation type="cmsannotation" annotationid="Keep in mind" comment="subhead" text="Keep in mind">Keep in mind</cmsannotation> It is important to take into account the complete cost of the loan, which includes the principal amount, interest rates and any additional fees. Conduct thorough research and compare offerings from various lenders to find the most favourable interest rates and loan terms that align with your requirements. “Carefully read and understand the terms and conditions of the loan, including repayment schedules and any potential penalties for late payments,” says Tyagi. Lastly, it is important to consider any possible changes in your financial situation and how they might impact your ability to repay the loan in the future. By being mindful of these factors, you can make a well-informed decision and enjoy your holiday without unnecessary financial strain in the years to come.

You Searched For "hdfc bank emi loan" and got 11 results

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5 things to keep in mind before taking a personal loan

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Here is how much your EMI will go up after the recent repo rate hike

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